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Energy Sector

Nigeria has 12,500 GW of installed generation capacity, being largely dependent on hydropower and fossil (gas) thermal power sources; 12.5% and 87.5% respectively. Although it is important to note that currently only 3,500 MW to 5,000 MW is typically available for onward transmission to the final consumer. Based on this scenario the country’s energy sector could be deemed as being in crisis, with the extensive losses attributable to non-availability of the installed capacity and a very high occurrence of significant technical and non-technical issues through the power supply value chain. The supplied electricity is delivered to Nigerians connected to the grid, though these customers suffer from extensive power outages a situation that results in annual consumption of electricity per capita being amongst the lowest in Africa, estimated at less than 150 kWh. Against this backdrop a significant number of businesses operational in the country possess standby generators, statistics on this captive generation capacity are not readily available however estimates are as high as 14-20 GW.


In response to this situation the Government of Nigeria in 2013 completed an extensive nine year-long process of power sector reforms centered on the privatization of the country’s main generation and distribution assets. In addition, to tackle the supply and distribution crisis, fifteen (15) government owned generation and distribution companies were sold to private owners in 2015.

Electricity Demand and Electrification Rates

Nigeria has an electrification rate of 45% and despite this relatively low figure in conjunction with the significant issues undermining power supply in the country, demand for electricity keeps increasing. In 2015, power supply in Nigeria averaged 3.1 GW, which was estimated to be only a third of the country’s minimum demand, with many consumers forced to rely on privately owned generators. As per the tables below data from 2014 shows that the residential sector is the largest consumer at over 50%.


Source: GIZ, 2015


According to projections by international observers, grid electricity demand in Nigeria is expected to increase at a very sustained rate from 2018. Additionally, grid demand will also be augmented by off-grid supply to meet consumption needs in the rural areas. Other studies which provide demand projections based on population growth and expected GDP growth rates provide however contrasting estimates.

Electricity generation

The total installed capacity of the 25 grid-connected generating plants in Nigeria is approximately 12.5GW, but many plants suffer from recurrent challenges such as maintenance and repair requirements, trips, faults, and leakages, that make them unavailable for evacuation to the national grid. The electricity sector is mainly based on natural gas thermal power plants. Approximately 85% of the grid-connected power plants are fossil fuel (gas) fired, while the remaining 15% are hydroelectric power plants. The table below lists the installed generation capacity per Power Station (MW) for all operational plants in Nigeria.


List of all operational plants in Nigeria

Power StationFuel TypeInstalled Capacity (MW)Average Available Capacity (MW)Average Operational Capacity (MW)
AES GASGas1801750
AFAM IV-VGas72432
AFAM VIGas685587455
ALAOJI NIPPGas72015867
GEREGU GASGas414159131
GEREGU NIPPGas450328179
IBOM POWERGas1909176
IHOVBOR NIPPGas434374182
OMOTOSHO GASGas335280163
SAPELE NIPPGas450184111

Source: National Renewable Energy and Energy Efficiency Policy (NREEEP) and Nigeria Power Baseline Report



Nigeria has one of the lowest net electricity consumption rates in the world (150kWh per capita in 2016), and only half of the population has access to the grid, a factor contributing to the high poverty rate.

The US Energy Information Administration (EIA) estimates that in 2011 total primary energy consumption was about 4.3 quadrillion British thermal units (Btus), of which traditional biomass and waste – wood, charcoal, manure and crop residues – accounted for 80%. This high share reflects the use of biomass to meet off-grid heating, lightning and cooking needs, mainly in rural areas.


Transmission and distribution network

The Transmission segment of the electricity value chain remains fully government owned; by the Transmission Company of Nigeria (TCN), but under a management contract with Manitoba Hydro International. Manitoba Hydro was hired in 2012 to reduce technical and commercial losses of TCN, improve the business process and split the company into the Transmission Service Provider (TCP) and Independent System Operator (ISO). Nigeria’s transmission network has the capacity to wheel about 5,300MW of power, however, due to generation constraints, less than this capacity gets wheeled. Underinvestment in building new infrastructure and lack of appropriate maintenance of the current infrastructure has constrained the transmission network expansion. Transmission losses on the line stand at ~7.4% (based on January to July 2015 data). Nigeria’s transmission network comprises of 159 substations and 15,022km of transmission lines. The transmission network has recorded a decline in system collapse incidents (partial and total) on the transmission grid between 2010 and 2015.


Source: Federal Ministry of Power Nigeria


Source: Nigeria Power Baseline Report


The distribution grid operates mainly on 33 kV and 11 kV level, i.e. medium voltage (MV) and low voltage level (LV). The distribution network accounts for an additional 12.5% of technical losses before electricity reaches the final consumer. In the wake of the power sector privatization that took place in 2103, 11 distribution companies covering a regional grid were sold to new private owners. Notwithstanding the privatization, most of the distribution companies do not receive sufficient electric power to operate at high enough volumes and recover their investment cost.



Gas Infrastructure

Seeing that 85% of the power generation infrastructure in Nigeria is fossil fuel based, mainly natural gas, the gas infrastructure plays a leading role in enhancing energy security in the country. Although Nigeria has abundant gas reserves, low levels of gas feedstock supply to the thermal power plants in the country has remained an issue; leading to fewer thermal plants being made operational. Despite huge volumes of natural gas production daily, only approximately 9%; 0.8bscpd (Billion Standard Cubic feet of Gas per day) gets delivered to the power plants. Certain factors can be attributed to the insufficient gas supply such as: insufficient gas-processing and pipeline infrastructure, lack of investment in gas-processing facilities, and failure to complete already funded projects. Another factor responsible for low levels of gas supply to the thermal power plants is regular vandalism of existing pipeline infrastructure by militants. Due to low domestic gas prices, investment in gas development to enhance the supply of natural gas feedstock to the power plants by upstream oil and gas companies are reportedly economically unviable.



Source: Nigeria Power Baseline Report



Electricity Tariffs

There is a specific tariff for each of the Distribution Companies (DisCo’s) to address cost reflectiveness of power generation and transmission of electricity in the value chain. The tariff for each DisCo is set by Nigeria Electricity Regulation Commission (NERC). The charges are comprised of three parts : a fixed monthly charge; for capital cost recovery, demand charge; for applied pressure (load amount) on the system, and an individual energy charge (for variable cost recovery). The tariff class depends on the consumption measured in kWh. the retail tariffs are denominated in Naira. The electricity consumers are divided into 5 sub categories.

  1. Residential: This category is strictly for residential energy consumers; R1 (life line), R2 (single and three phase), R3 (LV maximum demand), R4 (HV maximum demand)
  2. Commercial: This category is for consumers, whose premises are used for SMEs business e.g offices, beauty parlors etc. C1 (single and three phase), C2 (LV maximum demand), C3 (HV maximum demand).
  3. Industrial: This category uses their premises for manufacturing and other production processes. D1 (single and three phase), D2 (LV maximum demand), D3 (HV maximum demand).
  4. Street lighting: This category includes S1 (single and three phase).
  5. Special tariff: These consumers include the following; religious houses, government buildings, educational establishments, hospitals, agro-allied industries. A1 (single and three phase), A2 (LV maximum demand), A3 (HV maximum demand).

Off-Grid Electrification

Off-grid electrification initiatives in Nigeria are gradually emerging. In February 2017, the Federal Government of Nigeria launched an initiative to distribute 20,000 solar powered lighting systems to rural communities in the country. Additionally, Nigeria Intended Nationally Determined Contribution (INDC) to the United Nations Conference of Parties 21 (COP21) shows that the Federal Government plans to work towards adding 13GW of off-grid solar power by 2030. On a state level, Lagos state government through the Lagos Solar project, a joint investment of Lagos State Electricity Board (LSEB) and the UK Department for International Development (DFID), has installed nearly 5 MWp of solar generated off-grid power for 172 schools and 11 clinics within Lagos State. An additional 1.5 MWp is being installed at public health clinics in Kaduna State under the Solar Nigeria programme by DFID. Several other off-grid schemes with support from international partners, are gaining traction across the country.

Key figures

Available statistics:
Official language
Population (2016 est.)
Population growth (2016 est.), %
Median age (2016 est.), years
Urbanization rate (2010 - 2015), % p.a.
Urban population (2015), % of total
Rural population (2015), % of total
Population density (2015), per km2
HDI (2014)
152 of 188
National Currency
Naira, NGN
Exchange rate (April 2017), USD
1 USD = 305.75 NGN
GDP (2015), USD million current
GDP growth (2016), %
GDP annual growth rate forecast (2020), %
GNI per capita (2015), PPP current intl USD
Inflation (Dec. 2016), % y-o-y
Inflation Rate Forecast (2020), %
Foreign Direct Investment, net inflows (2015), BOP current USD millions
Net official development assistance (2014), current USD millions
Budget deficit (2016), % of GDP
Ease of Doing Business (2016), rank of 190
TI Corruption Index (2016), rank of 176
Installed Generation Capacity (2016), MW
Installed Fossil Fuel Capacity (2016), % of total installed capacity
Hydro Capacity (2015), % of total installed capacity
Other RE Capacity (2015), % of total installed capacity
Renewable electricity output as % of total electricity output excl. hydro (2015)
Avg. distribution and transmission losses as % of output (2015)
Net electricity imports (2012), %
Electrification rate, total (2014) %
Electrification rate, urban (2014) %
Electrification rate, rural (2014) %
Peak demand (2015), MW
Per capita electricity consumption (2016), kWh
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